Blood in the Chinese small cap streets? Or wait for fire sale prices?
I've been following Chinese small caps for the past couple of years, and it has been a very lucrative area to invest in. There a lot of wonderful things going on this investment category. The economy has been in rampant growth, especially for inwardly looking industries and alternative energy. It has opened up all sorts of opportunities for small companies to jump in and grow quickly. In addition, the small caps that aren't included in index funds had opportunity for huge bursts upward when a good company got discovered through uplisting or additional analyst coverage.
For the past two months, Chinese small caps have (as a sector) been getting crushed. There is an overblown hypothesis that the entire Chinese economy is going to explode due to real estate overbuilding in the large cities. EVERY Chinese small cap has taken a hair cut, not just the ones that had run too far. There is a lot of quality in the bargain bin.
Yet.....I just can't get myself to pull the trigger.
I can't help but think they COULD go significantly lower.....there is fairly priced, bargain priced.........and then there is stupidly priced. If possible, I think it's always a good idea to buy at stupidly low prices.
I think a lot of really good Chinese small caps are now in the bargain level.